LIC Housing Finance Ltd (LICHF) is one of the largest housing finance companies in India promoted by LIC. The company launched its maiden Global Depository Receipt (GDR) issue in 2004. The GDRs are listed on the Luxembourg Stock Exchange. The main objective of the company is to provide long-term finance to individuals for purchase/reconstruction of new/existing flats. We are positive on the company owing to the fundamental improvement in earnings from FY13E onwards benefiting from re-pricing and higher developer loan build up. The companys net profit is likely to grow at 29.9% CAGR over FY12-14E.
Investment Rationale
It has been observed that housing finance companies (HFCs) have been consistently gaining market share in the mortgage market as compared to their peer banks over the last five years. According to a report by CRISIL, the market share of HFCs in disbursement growth has increased to approximately 51% in FY11 from approximately 36% in FY07. This is a result of better |
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